Heritage Foods Limited

FINANCIAL STATEMENTS Consolidated 29 th Annual Report 2020-21 | 207 Key audit matter How our audit addressed the key audit matter Discounts are material and there are arrangements with varying terms based on schemes implemented throughout the year. • Evaluated the design and implementation of Holding Company’s controls in respect of revenue recognition, including discounts. There is a risk of revenue being overstated, resulting from pressure the management may feel to achieve performance targets at the reporting period end. • Performed substantive testing by selecting samples of revenue transactions recorded during the year by verifying the underlying documents, which included trip sheets, invoices, shipping documents and evidence of collection of receipts, as appropriate. Due to the materiality of amounts involved and above said considerations, revenue recognition from sale of goods is determined to be a key audit matter for the current year audit. • Performed substantive testing by selecting samples of discount transactions recorded during the year and comparing the parameters used in the calculation of the discounts with the relevant source documents (including invoices and schemes) to assess whether the methodology adopted in the calculation of the discounts was in accordance with the terms and conditions de fi ned in the schemes. Refer Note 3(e) to the Consolidated Financial Statements – Summary of the signi fi cant accounting policies and Note 25 for the revenue recognized during the year. • Performed cut-o ff testing by selecting samples of revenue transactions recorded before and after the fi nancial year end date by tracing to the relevant underlying documentation, to assess whether the revenue was recognized in the correct period. • Assessed manual journal entries posted to revenue to identify unusual items and tested such entries on a sample basis. • Evaluated appropriateness of disclosures made in the consolidated fi nancial statements in accordance with the requirements of Ind AS 115 and other applicable regulations. Information other than the Consolidated Financial Statements and Auditor’s Report thereon 6. The Holding Company’s Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the consolidated fi nancial statements and our auditor’s report thereon. Our opinion on the consolidated fi nancial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated fi nancial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated fi nancial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities ofManagement and Those Chargedwith Governance for the Consolidated Financial Statements 7. The accompanying consolidated fi nancial statements have been approved by the Holding Company’s Board of Directors. The Holding Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these consolidated fi nancial statements that give a true and fair view of the consolidated state of a ff airs (consolidated fi nancial position), consolidated pro fi t or loss (consolidated fi nancial performance including other comprehensive income), consolidated changes in equity and consolidated cash fl ows of the Group including its associate and joint venture in accordance with the accounting principles generally accepted in India, including the Ind AS speci fi ed under section 133 of the Act. The Holding Company’s Board of Directors is also responsible for ensuring accuracy of records including fi nancial information considered necessary for the preparation of consolidated Ind AS fi nancial statements. Further, in terms of the provisions of the Act, the respective Board of Directors/management of the entities included in the Group, and its associate company and joint venture company covered under the Act are responsible for maintenance of